Tiffany Appeals eBay Counterfeiting Decision

August 11, 2008byJCK Magazine

Tiffany & Co. said Monday that it has filed an appeal from the decision of the District Court in New York, which held that eBay, Inc. is not responsible to police its auction site to seek out and remove counterfeit goods before they can be sold to unsuspecting consumers.

The luxury jeweler filed its motion to the United States Court of Appeals for the Second Circuit.

“Unfortunately, the trial court incorrectly held that trademark holders and not eBay are responsible for policing the eBay site. The effect of this is that eBay can continue to profit at the expense of consumers and trademark holders,” said Patrick Dorsey, general counsel, Tiffany & Co. “In our view, this approach makes no sense as a matter of law or policy. Once eBay has reason to know that a specific brand like Tiffany & Co. is being widely counterfeited and sold, eBay should be compelled to investigate and take action to protect its customers and stop the illegal conduct.”

Tiffany sued eBay in 2004 after notifying eBay that 73 percent of a random sample of supposed Tiffany silver jewelry offered on eBay was counterfeit. The appeal will seek to overturn the trial court’s decision by District Judge Richard J. Sullivan saying that companies such as Tiffany & Co. are responsible for policing their trademarks online, not auction platforms like eBay.

“We do not believe the law allows auction sites like eBay to continue to turn a blind eye to this problem while reaping profits from the listing and sale of counterfeit merchandise,” said James B. Swire, a partner at the law firm of Arnold & Porter LLP. “Trademark law does not impose a duty on Tiffany to police eBay’s site: eBay designed the site and has the responsibility to police it.”